Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 04/04/07

Doorstop Interview
NICA, Prahran

Wednesday, 4 April 2007
12.45 pm

SUBJECTS: NICA, Interest rates on hold, water

TREASURER:

This is a great day – the opening of the National Circus Centre for NICA which is one of the most prestigious training institutes for young people, training young Australians in circus arts to go on and take on the world. And if you saw the show that we have just seen you would be impressed with the talent of these wonderful young people. It is my great pleasure to be here to open this circus centre and I hope that the people that are trained here and go on to display their arts in Australia and throughout the world will being a lot of happiness to a lot of children and a lot of people all around the world.

JOURNALIST:

Treasurer, what do you think of the RBA’s decision to leave rates on hold?

TREASURER:

Well the decision that has been made by the Board today obviously takes into account the various indicators in relation to the economy. The most important of which of course is inflation. We have to keep inflation low to ensure that the Australian economy continues to grow. And the fact that we have got pressures coming from overseas, particularly in relation to oil and petrol prices makes that harder. But we are very focussed on keeping inflation low, the economy growing and making sure that Australians continue in work.

JOURNALIST:

So how likely do you consider that there will be another rate rise in the next month or two?

TREASURER:

I won’t be commenting on future rate rises or falls for that matter.

JOURNALIST:

As we speak petrol prices are going up all around town, are you confident that the ACCC will be keeping an eye on the dealings?

TREASURER:

I have asked the ACCC to have heightened surveillance in the lead up to Easter. They are monitoring around 50 per cent of the petrol stations in Australia. If there is any evidence of collusion at all, the people who engage in that collusion will be prosecuted and fines of millions or tens of millions of dollars can be imposed. And this is an area actually where the public can help. If the public sees signs of collusion ring the ACCC hotline and help to ensure that the surveillance is successful.

Well I have read the report, I don’t think it says that at all. I think the speech stands for itself. He talks about some of the achievements of the Treasury, he talks about some areas where the Treasury can add value. I was interested to read the speech myself.

JOURNALIST:

Do you expect some concern about a possible deterioration of public policy in the lead up to the election?

TREASURER:

Well, I have been, as Treasurer through 1998, 2001, 2004 elections. We came out of the elections with the Government being re-elected with the Budget in a strong position and with economic growth prospects heightened. That is what I will be looking to do coming out of this election. And of course if the Government is defeated it is quite possible that bad economic policy will come out of the election. But I have every confidence that if the Government is returned as you have seen over the last ten years, there is the record. The economic policy will be a strong one.

JOURNALIST:

Would the Murray-Darling water plan have been better with more Treasury input?

TREASURER:

Treasury is no water expert. Treasury is good at Treasury but Treasury has not been engaged in water.

JOURNALIST:

The latest decision by the RBA show that inflation is under control?

TREASURER:

Well today’s decision shows that the inflation target that we have which is 2 to 3 per cent is on track. We will wait to see what develops in the Australian economy. Obviously the petrol price is a great risk but today’s decision is consistent with a growing economy, very strong jobs growth, it is consistent with low inflation and we want to make sure that the economy stays in that place.

JOURNALIST:

Mr Henry expressed specific concern that the Government hadn’t been attentive to the Treasury view. What is your response to that?

TREASURER:

I don’t think he said that at all.

JOURNALIST:

That is the word he used.

TREASURER:

Well, you had better go and ask him then.

JOURNALIST:

Are you worried that an interest rate rise closer to the election could have an effect on voters?

TREASURER:

Look, during the period that I have been Treasurer, we instituted a monetary policy which puts the bank on an independent footing. We gave it an inflation target and we asked it to direct towards that target. That is what it is doing. It is probably the most transparent monetary policy in Australia. And now people are emulating us all around the world. So we have just got to keep working towards our goals. What are our goals? Jobs for Australians, low inflation, continuing prospects for business and opportunities in a growing economy. That is what we work towards.